Currency in EUR
Last close As at 25/03/2023
EUR4.04
▲ 0.06 (1.51%)
Market capitalisation
EUR440m
Research: Consumer
Borussia Dortmund’s Q223 results reflect the negative effects of the first time staging of the FIFA World Cup during the football season, offset by underlying improvements due to the absence of COVID-19-related restrictions. The company’s financial results are more dependent on H2 than in a typical year due to the changes in scheduling. However, the first team appears well placed in the Bundesliga and has made good progress in the Union of European Football Associations (UEFA) Champions League. Management has reiterated its FY23 guidance. The share price continues to look well supported by our asset backed sum-of-the-parts valuation, which has increased to €11.3/share (€10.5/share previously).
Borussia Dortmund |
FIFA World Cup affects Bundesliga schedule |
Q223 results |
Travel and leisure |
1 March 2023 |
Share price performance
Business description
Next events
Analysts
Borussia Dortmund is a research client of Edison Investment Research Limited |
Borussia Dortmund’s Q223 results reflect the negative effects of the firsttime staging of the FIFA World Cup during the football season, offset by underlying improvements due to the absence of COVID-19-related restrictions. The company’s financial results are more dependent on H2 than in a typical year due to the changes in scheduling. However, the first team appears well placed in the Bundesliga and has made good progress in the Union of European Football Associations (UEFA) Champions League. Management has reiterated its FY23 guidance. The share price continues to look well supported by our assetbacked sum-of-the-parts valuation, which has increased to €11.3/share (€10.5/share previously).
Year end |
Revenue |
EBITDA |
PBT* |
EPS* |
DPS |
P/E |
EV/EBITDA |
06/21 |
334.2 |
39.0 |
24.3 |
0.26 |
0.0 |
16.3 |
12.4 |
06/22 |
351.6 |
80.8 |
63.2 |
0.63 |
0.0 |
6.8 |
6.0 |
06/23e |
395.0 |
105.9 |
91.6 |
0.76 |
0.0 |
5.6 |
4.5 |
06/24e |
420.5 |
120.2 |
105.9 |
0.88 |
0.0 |
4.8 |
4.0 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q223: Fewer games but more fans per game
Borussia Dortmund’s Q223 year-on-year revenue decline of 1% to €117.3m includes good growth for match operations, advertising and conference, catering and miscellaneous, but is offset by declines for TV marketing and merchandising. The results reflect fewer home games played, five in the period versus 10 in Q222, but with higher-than-average attendance as the comparative period was negatively affected by COVID-19-related restrictions. The 15% y-o-y decline in EBITDA to €28.9m reflects the lower revenue generated and deleveraging of other operating expenses (mainly higher match day expenses due to greater crowds), which were partially offset by leveraging of personnel expenses. Free cash flow generation was negative, although the outflow of €10.7m was an improvement from Q222’s outflow of €16.8m, the key driver to the period-end net debt position increasing to €19.9m from €8.6m at the end of Q123.
FY23: Guidance reiterated
Management has reiterated its FY23 financial guidance, which was issued with the publication of FY22’s results. The first team’s performance has improved following the end of the FIFA World Cup, moving from sixth in the Bundesliga at the end of Q223 (after seven games) to being joint top at the time of writing (after 22 games), and five points clear of the fifth-place team. On 7 March 2023, the team travels to Chelsea Football Club to play the second game in Round 16 of the UEFA Champions League with a 1–0 advantage. Progression in this competition may be supportive for upgrades to profit estimates.
Valuation: Significant discount
Our sum-of-the-parts valuation increases to €11.3 per share (€10.5 per share previously) to reflect the increase in peer multiples, chiefly the increase in Manchester United’s valuation due to takeover offers, as well as updates to Borussia Dortmund’s financials. The company’s attractive valuation relative to its own trading history was highlighted in our MediaWatch report.
Exhibit 1: Financial summary
€m |
2020 |
2021 |
2022 |
2023e |
2024e |
||
30-June |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
370.2 |
334.2 |
351.6 |
395.0 |
420.5 |
Cost of Sales |
(22.4) |
(19.6) |
(22.6) |
(25.2) |
(26.3) |
||
Gross Profit |
347.8 |
314.6 |
329.0 |
369.9 |
394.2 |
||
EBITDA |
|
|
63.0 |
39.0 |
80.8 |
105.9 |
120.2 |
Operating profit (before amort. and excepts.) |
|
|
49.1 |
25.3 |
67.4 |
92.2 |
106.3 |
Amortisation of acquired intangibles |
(88.3) |
(92.6) |
(87.5) |
(85.4) |
(93.9) |
||
Exceptionals |
(3.9) |
(4.8) |
(9.1) |
0.0 |
0.0 |
||
Reported operating profit |
(43.1) |
(72.1) |
(29.2) |
6.9 |
12.3 |
||
Net Interest |
(3.4) |
(1.1) |
(4.2) |
(0.6) |
(0.3) |
||
Joint ventures & associates (post tax) |
(0.0) |
0.1 |
0.1 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
45.6 |
24.3 |
63.2 |
91.6 |
105.9 |
Profit Before Tax (reported) |
|
|
(46.6) |
(73.2) |
(33.4) |
6.2 |
12.0 |
Reported tax |
2.6 |
0.3 |
(1.7) |
0.0 |
0.0 |
||
Profit After Tax (norm) |
43.0 |
24.2 |
66.4 |
84.3 |
97.5 |
||
Profit After Tax (reported) |
(44.0) |
(72.8) |
(35.1) |
6.2 |
12.0 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
43.0 |
24.2 |
66.4 |
84.3 |
97.5 |
||
Net income (reported) |
(44.0) |
(72.8) |
(35.1) |
6.2 |
12.0 |
||
Average Number of Shares Outstanding (m) |
92.0 |
92.0 |
105.4 |
110.4 |
110.4 |
||
EPS - normalised (c) |
|
|
46.8 |
26.3 |
63.0 |
76.3 |
88.3 |
EPS - normalised fully diluted (c) |
|
|
46.8 |
26.3 |
63.0 |
76.3 |
88.3 |
EPS - basic reported (€) |
|
|
(0.48) |
(0.79) |
(0.33) |
0.06 |
0.11 |
Dividend (€) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
(0.0) |
(9.7) |
5.2 |
12.3 |
6.4 |
||
Gross Margin (%) |
94.0 |
94.1 |
93.6 |
93.6 |
93.7 |
||
EBITDA Margin (%) |
17.0 |
11.7 |
23.0 |
26.8 |
28.6 |
||
Normalised Operating Margin |
13.2 |
7.6 |
19.2 |
23.3 |
25.3 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
441.5 |
389.8 |
358.4 |
364.4 |
355.6 |
Intangible Assets |
229.7 |
193.4 |
124.4 |
132.0 |
131.1 |
||
Tangible Assets |
193.0 |
183.5 |
172.5 |
170.8 |
162.9 |
||
Investments & other |
18.8 |
12.9 |
61.6 |
61.6 |
61.6 |
||
Current Assets |
|
|
76.5 |
60.7 |
96.6 |
99.3 |
115.7 |
Stocks |
6.8 |
6.8 |
4.4 |
4.4 |
4.4 |
||
Debtors |
36.5 |
29.9 |
45.8 |
49.8 |
49.8 |
||
Cash & cash equivalents |
3.3 |
1.7 |
10.6 |
9.3 |
25.7 |
||
Other |
29.9 |
22.2 |
35.8 |
35.8 |
35.8 |
||
Current Liabilities |
|
|
(122.6) |
(163.6) |
(130.6) |
(133.1) |
(133.1) |
Creditors |
(110.2) |
(100.1) |
(125.9) |
(132.9) |
(132.9) |
||
Tax and social security |
(0.0) |
(0.0) |
(0.0) |
(0.0) |
(0.0) |
||
Short term borrowings |
(8.0) |
(56.9) |
0.0 |
0.0 |
0.0 |
||
Finance leases |
(4.4) |
(4.2) |
(4.6) |
(0.1) |
(0.1) |
||
Other |
0.0 |
(2.3) |
0.0 |
0.0 |
0.0 |
||
Long Term Liabilities |
|
|
(89.9) |
(54.3) |
(44.0) |
(44.0) |
(39.5) |
Long term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Finance leases |
(20.1) |
(16.8) |
(12.5) |
(12.5) |
(12.5) |
||
Other long-term liabilities |
(69.9) |
(37.5) |
(31.4) |
(31.4) |
(26.9) |
||
Net Assets |
|
|
305.4 |
232.6 |
280.5 |
286.7 |
298.7 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
305.4 |
232.6 |
280.5 |
286.7 |
298.7 |
CASH FLOW |
|||||||
Operating Cash Flow |
59.5 |
37.9 |
76.6 |
105.2 |
119.9 |
||
Working capital |
(18.0) |
(6.9) |
16.3 |
(4.0) |
0.0 |
||
Exceptional & other |
(38.9) |
(13.6) |
(57.5) |
(52.4) |
(59.7) |
||
Tax |
0.3 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net operating cash flow |
|
|
3.0 |
17.4 |
35.4 |
48.9 |
60.2 |
Capex |
(6.1) |
(3.4) |
(1.7) |
(12.0) |
(6.0) |
||
Net investment in intangibles |
(44.6) |
(58.6) |
(49.4) |
(33.0) |
(33.0) |
||
Acquisitions/disposals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net interest |
(3.3) |
(1.4) |
(0.3) |
(0.6) |
(0.3) |
||
Equity financing |
0.0 |
0.0 |
86.5 |
0.0 |
0.0 |
||
Dividends |
(5.5) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
(3.9) |
52.5 |
(61.6) |
(4.5) |
(4.5) |
||
Net Cash Flow |
(60.6) |
6.4 |
8.8 |
(1.3) |
16.4 |
||
Opening net debt/(cash) |
|
|
(44.4) |
29.1 |
76.2 |
6.6 |
3.4 |
Other non-cash movements |
(12.9) |
(53.6) |
60.8 |
4.5 |
0.0 |
||
Closing net debt/(cash) |
|
|
29.1 |
76.2 |
6.6 |
3.4 |
(13.0) |
Source: Borussia Dortmund, Edison Investment Research
|
|
Research: TMT
MotorK’s FY22 results showed a 40% y-o-y increase in reported revenue and a 78% increase in annual recurring revenue (ARR, 40% organic growth), driven by new enterprise contract wins, higher retail average contract values (ACV) and contributions from newly acquired companies. Customer churn remained low, while net retention benefited from higher levels of cross- and up-selling, underpinned by multi-product adoption. Higher marketing and R&D costs affected cash in FY22 but should support operating leverage from FY23 now that most of the investment is complete.
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